Abstract

The aim of this thesis is to examine the Clean Development Mechanism (CDM) as a new instrument for technology transfer to developing countries, especially Bangladesh, in order to analyse its potential and develop policies and strategies for its successful implementation. The main research question the thesis addresses is whether the Clean Development Mechanism can assist the sustainable development of developing countries, such as Bangladesh.

Under the 1997 Kyoto Protocol, the Clean Development Mechanism allows developed countries to invest in abatement opportunities in developing countries and receive credit for the resulting emissions reductions, thus becoming a tool for technology transfer. In the past, developing countries have been eager to participate in technology transfer but this has often come at a cost and not in the most beneficial way. The spirit of the CDM is to support sustainable development and encourage mutually beneficial transfer of appropriate technologies.

The CDM is a form of market tool in which valuable goods and services are to be bought and sold. A number of technical, regulatory, project finance and administrative functions must be performed for this tool to operate. Many of these functions may be most effectively undertaken by private markets or existing international institutions. However, developing countries face problems during international technology transfer, that are still apparent under the CDM; for example: lack of proper knowledge, inadequate bargaining power, insufficient skilled persons and capable human resources, not enough adaptive capabilities, limited number of sophisticated physical facilities, fear about the effective control over national assets, uncertainty about the effects of foreign investment on the exploitation of national resources, etc. On the other hand, the CDM has the potential to fund 'technological leapfrogging' that would enable developing countries to bypass inefficient choices, such as coal technology, made by industrialised countries.

Poverty alleviation and development problems have been the main concern of poor countries among an obvious shortage of good will on the part of governments in industrialised countries to contribute towards these aims. New mechanisms that can stimulate investment from government as well as the private sector are needed to combat these shortcomings. Does the CDM have the potential to contribute to these broader goals? This research explores how the Clean Development Mechanism can potentially play such a role and how suitable it is within the broader picture of poverty and underdevelopment in the case of Bangladesh.

This thesis argues that the CDM, which came into force early in 2005, has the potential to become a useful tool in coping with climate change and benefit the entire global population. However, the majority of developing countries will have to balance national necessities, such as poverty eradication, food security and education, with encouraging CDM projects. The only way the CDM can contribute to sustainable development in these parts of the world (including Bangladesh) is if the mechanism embraces simultaneously social, economic and environmental responsibility and avoids becoming yet another tool to make the economically rich more richer.